Executive Summary
Fancy Fashion Inc. a global supplier of sport apparel does business through retailers in North America, Europe and Australia, but has existing suppliers in China, Korea, Taiwan, and Vietnam. The company has seen increasing profit margins, but over the years has been facing intensifying competition from new entrants, and inaccurate demand forecast that resulted in stock outs from time to time in many of its retail stores. In addition to all this, it appears that one of the contract manufacturers employed by Fancy Fashion has been involved in selling illegal knock offs through gray channels that would be significantly affecting the company reputation and profit margins. It is essential that the solutions to these problems are
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a trend setter in the industry and one of the most profitable in the industry. Many new competitors emerged in recent years hoping to replicate Fancy Fashion’s results. This intensifying competition arrived from manufactures of similar winter and summer outdoor sportswear. Moreover, Fancy Fashion Inc. faced inaccurate demand forecasts on both its winter lines and summer lines. The firm also faced issues on unexpected variations in the length of delivery, consistency on finishing the product at the expected time, and cost of transportation services. As a result, the company faced stock outs of needed items at retail stores from time to time. In order the resolve or mitigate the issue mentioned above, it is imperative that a strategic sourcing process is developed to better guide the approaches taken by the company with regard to the supply side of its business. In addition to these issues, it might appear that the contract manufacturers are manufacturing illegal, knock off versions of the products that are being sold through the “gray market” channels. The company would have to verify this suspicion before finding better …show more content…
• Vietnam has made significant efforts to ensure that foreign investors are not disadvantaged compared to their local counterparts.
• The Government has undertaken measures to simplify the administrative processes for import and export and making tax payments; and is committed to reforms that would double GDP per capita. The massive corruption among government officials poses a major threat to the ruling party, which exacerbated the public dissatisfaction.
Economic GDP is growing is at 5.62 percent with a young and cheap labor force; and exchange rate difference a double digit inflation, export decline, and unemployment
Social The hierarchical structures are based upon age and status, and the society is a collectivist society where the need of the group is often placed over the individual. Understanding its social factors and applying it could enable Fancy Fashion to select or negotiate with suppliers better. Foreigners would have to understand and be sensitive to the serious natures faced; failure to do so could negatively impact relations with a loss of credibility and trust in the long
One look at the common-size income statements for these companies can tell a story. While Jones Apparel Group was lagging at year ended 1998, even with a restructuring charge on Liz Claiborne’s income statement, 1999 was a different story. Huge growth at Jones lead to revenues double of that one year ago while Liz, while increasing, was quickly falling behind. The growth for both of these companies continued into the year ended 2000, but Jones Apparel Group’s results were brilliant compared to Liz Claiborne’s. One billion dollar growth in revenues as well as higher net income is making Jones Apparel Group the company of the future.
The heart of the problem needs to be addressed in order to resolve the issue and that
The Trickle-down theory, a well-known theory in fashion industry, has significant meaning in 19th to 20th century Europe. The American economist and sociologist, Veblen, published The theory of the Leisure Class by 1899, in which he discussed the split between the leisure class and the industrial class in the US critically. He concluded that leisure class treats dress as a sign of their status and possessions, furthermore, ‘Dress must not only be conspicuously expensive and inconvenient; it must at the same time be up to date’(Veblen 1994), by saying that, he refers to upper class was tend to create new fashion trend which was the top of the trickle-down theory. In the 20th century, Simmel, the German sociologist and philosopher, developed this theory further from a more sympathetic perspective. He drew much attention to sameness and difference amongst both classes in his book Fashion (Simmel 1973). The upper class gets self-satisfied and the proof of its priority by distinguishing itself from others, and working class follows the fashion trend which led by upper class in order to feel like he or she is ‘belonging to’ higher class. These opinions which were discussed by Veblen and Simmel were coined by a journalist in the mid-20th century, as ‘Trickle- down Theory’. During mid-18th to early 20th century, the trickle-down theory described the process of how fashion flows, and explains that fashion is a cultural and sociological phenomenon which includes the discourse of identity and uniformity, agency and structuralism. This phenomenon was not limited by geography, at the same period, in the other side of the world, similar situation happened in China which is a typical East Asian country....
Some quantities of the company’s products find their way to unapproved outlets or distribution channels. This gray market for Callaway’s products can undermine authorized retailers and foreign wholesale distributors who promote and support the company’s products and can negatively impact its image in the minds of its customers. On the other hand, stopping such sales could result in a potential decrease in sales to those customers who are selling Callaway products to unauthorized distributors and/or an increase in sales returns over historical levels.
Fashion in the 21th century is a big business, as its production employs millions of people and generates billions of dollars in revenue. Fashion has for the past century been, and is still today, used as an indicator of social change and progress, as it changes with the social norms of the society and the political changes of the world (Finkelstein 3).
In such situations, the buying industry often faces a high pressure on margins from their suppliers. The relationship to powerful suppliers can potentially reduce strategic options for the organization.
In addition, Vietnam had and still has a Communist government and a socialist economic model. However, the Vietnamese are trying to move more towards a free market system. Meaning that the Vietnamese want a market economy where the forces of supply and demand are not controlled by the government, nor any other authority. Moreover, every members of the government are elected by Vietnam’s National Assembly. Additionally, Vietnam is one of the fastest growing financial country in the world with, according to bbc.com, a nominal GDP that reached about $170 billions. Also, Vietnam became one of the highest leading agri...
Analysis of sports clothing industry, including its main features, key market drivers and competition within industry.
Counterfeit goods pose a significant challenge to the global economy and international trade; in 2013 alone, sales of counterfeit and pirated goods comprise 2.5% of the total international trade, exceeding $461 billion (Medium, 2017). In such an economic environment where intellectual property rights are being challenged and governments are figuring out ways to control counterfeit goods, Finer Bags came out with a surprising business model – sell fake goods and advertise them as such (Brusseau, 2012). It was a courageous step relying on honesty on part of the company. Operating with an open policy also means that the conflict between the company’s ethical code and employee behavior on the ground has been reduced (Brusseau, 2012). Finally, whether
Fast Fashion may be the most significant disruptive in the retail industry today. Troublesome novelties, or product or services, that alter an prevailing market by presenting minimalism, suitability, convenience and affordability, have the most positive influence on a company. Because fashion is ever changing and technology is always evolving the amount of production time it takes for something to be manufactured
The organization has had to ensure that it has retail stores in many countries globally and website options in more than 100 countries. The company further enhances access of online stores in more than 37 countries which is accessible all the time and people are able to access the services regardless of their location. Globalization further affects the organization in the sense of international market management which requires it to engage in strictly global decision making. The organization’s production networks have been geared to enhancing global competition (Lüsted, 2012) .The Company is further good when it comes to seizing the opportunities available in global market. For the organization to find efficient as well as cheap means of production, it has to bargain hard so as to allow its contractors to have low profits. This mostly is consequential to the suppliers cutting corners with the use of cheap
...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.
The Apparel or clothing industry is a very dynamic market where changes occur in a daily basis. So, rivals within this industry assist to an extreme competition. To make sure that, they stay relevant in the market scene, businesses have to develop creative, innovative and sustainable marketing strategies to attract more customers and increase their brands awareness. Because, this industry has many players, we have chosen one well known company to make our research more specific and well centered. Hennes and Mauritz AB commonly known as H&M is our best choice because, this
... 2005 are not all that rare. Other issues of political nature create a large amount of uncertainty in supply chains around the world. Therefore, companies need to be aware of this and reduce their risk by maintaining relationships with alternate suppliers.
Mr. Price is a fashion retailer; this report will focus on the clothing department. Mr. Price clothing aims to sell trendy fashion items at competitive